Bulgaria ranks second in the European Union (EU) in terms of debt. This is shown by the latest data of the European Statistical Office (Eurostat). Only Estonia has a lower level of debt to gross domestic product (GDP).
The country is also in seventh place in the EU in terms of the size of the budget deficit for 2023, but there are also four countries for which it ended in surplus last year. These are Ireland, Cyprus, Denmark and Portugal even reported a surplus last year.
According to Eurostat data, the deficit in the state budget for 2023 was nearly BGN 3.5 billion or 1.9% of the country’s GDP. Thus, it shrinks after the reported deficit of 2.9% of GDP in 2022.
The ratio of debt to GDP is 23.1% and increased slightly compared to the previous year, but is far below the EU average levels.
This means that our country finished last year with deficit and debt levels far below the permissible 3% deficit of GDP and 60% debt of GDP.
These indicators are particularly important in the context of Bulgaria’s aspiration to join the Eurozone.
The only criteria for membership that Bulgaria still does not meet is inflation. However, according to the spring forecast of the Ministry of Finance, it will shrink faster than forecast in the fall of 2023.
It is expected average annual inflation for 2024 to be 2.4%, and not as predicted in the previous forecast, when the cost of living increase at the end of the year was expected to be 4.8%.
According to the analysis of the MoF the slowdown of the inflationary processes in the country is largely due to the tendency to lower the prices of raw materials on the international marketsas well as the base effect of the accelerated price appreciation in the previous year.
The political crisis is delaying Bulgaria’s membership in the Eurozone, UniCredit analysis points out
